
Targets for mergers and acquisitions shifted in second-quarter 2021 as public companies turned to the private market. (Source: Shutterstock.com)
Here’s something about Januarys—especially when they aren’t cold—that puts a chill in the oil and gas A&D market.

By spring, however, M&A in the U.S. had regained its footing with a sizzling $33 billion second-quarter from more than 40 deals—seven worth at least $1 billion, according to Enverus.
Andrew Dittmar, senior M&A analyst at Enverus, said that investor pressure to operate leaner made consolidation a priority.
“With three extremely active quarters out of the last four, there has been more than $85 billion announced in upstream M&A during the prior 12 months,” he said.
But the targets for mergers and acquisitions shifted in second-quarter 2021. During 2020, consolidation between public companies focused on operational and G&A synergies drove deals.
In 2021, only two public company combinations were tallied more than $1 billion: Bonanza Creek Energy Inc.’s $1.4 billion purchase of Extraction Oil & Gas Inc. in Colorado’s Denver-Julesburg Basin and Cabot Oil & Gas Corp.’s merger with Cimarex Energy Co. in a deal that valued Permian Basin and Midcontinent producer Cimarex at $9.3 billion. Only the Bonanza Creek merger offers operational synergies.
Public companies instead turned to the private market:
- Pioneer Natural Resources Co. agreed to a $6.4 billion deal for Midland Basin pure-play DoublePoint Energy;
- Southwestern Energy Co. will buy Indigo Natural Resources LLC for $2.7 billion; and
- EQT Corp. purchased the Marcellus’ Alta Resources LLC for $2.9 billion.
“The uptick in acquisition activity targeting private equity-backed E&Ps is likely a welcome relief for sponsors that were challenged to find exit opportunities over the last few years,” Dittmar said. “The deals targeting private E&Ps are less about cost-cutting synergies and more about adding inventory. That can be in a buyer’s home basin, like Pioneer/DoublePoint, or entering a new area as Southwestern did by acquiring Indigo in the Haynesville Shale.”
Second-quarter 2021 Deals by Value |
||||
Date | Buyer | Seller | U.S. Play | Value ($B) |
5/24/21 |
Cabot Oil & Gas |
Cimarex Energy |
Delaware/Midcon | $9.25 |
4/1/21 |
Pioneer Natural Resources |
DoublePoint Energy |
Midland Basin | $6.45 |
6/8/21 |
Contango Oil & Gas |
Independence Energy |
Multiple | $4.48 |
6/2/21 |
Southwestern Energy |
Indigo Natural Resources |
Haynesville | $2.98 |
5/6/21 |
EQT |
Alta Resources |
Marcellus | $2.9 |
Private equity sponsors are receiving mostly buyer’s equity in these sales, with stock constituting about 70% of the value paid with the balance made up of cash and debt assumed. In past years, private sellers typically only wanted cash.
“Following a rally in equities that raised the valuation for public E&Ps, their stock represents an attractive currency to buy private and PE-backed counterparts,” Dittmar said.

Read more in the “A&D Refueled” cover story featured in the August 2021 issue of Oil and Gas Investor.
Recommended Reading
DUG Permian, Eagle Ford: Chevron Answers Political Criticism Over High Oil Prices
2022-05-17 - The Biden administration mistakenly believes that the shale industry can "just run out, set up a bunch of rigs and grow production over night,” said Steve Green, president of Chevron's North America E&P division, speaking at Hart Energy's DUG Permian and Eagle Ford conference.
Chevron Acquires Stake in Talos’ Proposed Texas Carbon Capture Plant
2022-05-03 - As part of the agreement, Talos and partner Carbonvert would contribute the Bayou Bend CCS lease to an expanded JV including Chevron in exchange for consideration of cash at closing and capital cost carry through project FID.
BP, Linde Announce Major Carbon Capture Project Near Houston
2022-05-17 - Upon completion, the project will capture and store CO2 from Linde’s hydrogen production facilities in the greater Houston area—and potentially from its other Texas facilities.
Lapis Energy CEO Discusses New Arkansas CCS Project
2022-05-12 - A new carbon capture project announced by Lapis Energy and LSB Industries will be the first CCS project in the state of Arkansas and only the third project from ammonia production in the U.S.
OTC 2022: TechnipFMC Plunges Deeper into Offshore Renewables
2022-05-05 - As the energy transition unfolds, TechnipFMC is creating partnerships and advancing technology in greenhouse gas removal, offshore floating renewables and hydrogen.